ESTATE PLANNING OVERVIEW
UNSURE OF HOW TO PROCEED?
WHAT is an estate plan,
WHY do I need one,
WHERE do I start?
A comprehensive Estate Plan is a set of legal documents that includes an
Advance Health Care Directive, Durable Power of Attorney for Finance,
Will and Trust. They help ensure that your wishes are met in the case
of incapacity or death.
Together, if you are properly educated and your documents are well- drafted,
they will reduce the burden on your loved ones, help ensure your wishes
will be honored, avoid court and maintain harmony within your family.
Let’s look at each of these four documents in a little more detail:
Advance Health Care Directive (AHCD): Also known as a Medical Durable Power of Attorney and Living Will. This
document designates a Health Care Agent to make medical decisions on your
behalf if you become incapacitated and memorializes your medical care
Durable Power of Attorney for Finance (DPOA): A legal document that gives someone authority to act on your behalf for
legal and financial matters. If you are incapacitated, it enables your
agent to make decisions such as paying bills, filing taxes, handling insurance,
pensions, social security, etc.
Will: A Will states how you want your assets distributed after you die and will
name a guardian if you have minor children. However, all Wills go through
probate if you have more than $184,500 in assets, with some exceptions.
Probate is a long expensive court process. It also means that your kids
will get their inheritance when they turn 18 - Yikes!
Trust: A trust can be revocable (changeable) or irrevocable (unchangeable). Like
a Will, it states how you want your assets distributed. However, if done
correctly, it will avoid the court process. It also allows you to “control
from the grave” and sprinkle money over time for your beneficiaries,
or requires that certain conditions be met prior to inheriting.
Why do you need an Estate Plan?
First, if you become incapacitated, no one can make health, financial or
legal decisions for you without an AHCD and a DPOA. Without these documents,
you cannot make decisions for a spouse or partner, child who is over 18,
aging parent, sibling, etc. This forces your loved ones to go to court
to file for conservatorship.
Second, if you die without a Will or even with a Will, your estate may
be headed to probate. This is a very expensive and long process that can
be completely avoided.
Here are a few definitions of terms that may be confusing:
Conservatorship is the court process where the judge names someone to make health, legal
and financial decisions for you. You have
no say on who this is! It’s permanent court intervention in your private
Probate as mentioned above is the court process to distribute your assets to the
beneficiaries. It is triggered for everyone who has over $184,500 in assets
(that are not jointly owned or have beneficiary designations)
whether you have a Will or not. A valid Will ensures that your estate goes to your intended beneficiaries.
If you don’t have a Will, the law of intestacy will dictate who
gets your estate whether you like it or not. Probate is very expensive
and can take a year or more. However, if you have a well-drafted and funded
trust, your beneficiaries will avoid court altogether!
Trust Administration is the process to distribute your estate according to the terms of your
trust. You can sprinkle assets over time for beneficiaries who need a
bit more supervision due to age, disability, spendthrift tendencies, etc.
It is done outside of the court and therefore private and much less expensive.
Some trusts are headed for court if not done correctly (e.g., they must
be funded, well-drafted and have the appropriate trustee).
What does all this boil down to?
1. You have the choice: create or update a comprehensive Estate Plan
or have faith in a judge who doesn’t know or care about you.
2. You can save tens of thousands of dollars
or waste that on more lawyers.
3. You can give a gift to your family
or burden them.
Be smart and show your family you love them:
get a comprehensive Estate Plan in place!
Simply fill out the form on the right and we can schedule a complimentary
call to discuss your unique situation and answer your questions.
It is that simple… take this incredibly important step!